Musk Claims That The New Tesla Industries Are Losing Billions Of Dollars

June

23

By Awi Khan // in Business

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Due to battery deficiencies and supply interruptions in China, Elon Musk argues that Tesla’s latest plants in Germany and the US are “losing billions of dollars.”

The billionaire also referred to the Austin, Texas, and Berlin factories as “gigantic money furnaces.”

Production has become more problematic as a result of the Covid-19 lockdowns that have occurred in China this year, including one in Shanghai, where Tesla has a large facility.

Mr. Musk has been announcing job layoffs at the company in recent weeks.

“Right now, the factories in Berlin and Austin are both huge money furnaces. It sounds like money is on fire and makes a massive roaring noise “said Mr. Musk, the CEO of the manufacturer of electric vehicles.

The plants are “now losing billions of dollars. There are countless expenses but very few results “In an interview with the Tesla Owners of Silicon Valley, a group recognized by the company, he noted.

Since they were launched earlier this year, the so-called gigafactories, according to Mr. Musk, have had trouble increasing production.

Because some battery-related components were “trapped” at a Chinese port “with no one to actually transport it,” he said, Tesla’s Austin plant only presently generates a “small” number of cars.

Mr. Musk stated, “This is going to all get solved real fast but it required a lot of attention.”

Even though this interview portion was only released on Wednesday, the whole discussion was recorded near the end of last month.

In response to a rise in Covid-19 infections, Chinese authorities closed down several significant cities earlier this year.

The movement of people and goods was subject to stringent restrictions, even in Shanghai, manufacturing, finance, and shipping center.

Tesla stopped most of its manufacturing at its Shanghai “gigafactory” for weeks due to the closure, which Mr. Musk characterized as “very, very tough” for Tesla.

According to an internal memo obtained by the Reuters news agency, the site will once again be inaccessible for two weeks next month for improvement work.

As per the article, this is added to enhance the site’s output and get it closer to the company’s objective of having the plant produce 22,000 cars every week.

A BBC request for comment got no immediate response from Tesla.

Due to the rising cost of raw materials like lithium and aluminum, the firm hiked the value of its whole lineup of automobiles in the US by about 5% last week.

After stating earlier that he had a “very awful feeling” about the economy, Mr. Musk announced this week that Tesla planned to reduce its global workforce by 3.5 percent.

On Thursday, a German automaker, BMW, announced that formal production has opened at its new $2.2 billion (£1.8 billion) facility in Shenyang, a city in northeastern China.

BMW stated that the factory, which would be it’s third in China, will boost production there from 700,000 to 830,000 vehicles annually.

 

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